Iran to build, buy overseas oil refineries to ensure oil sales

Iran is mulling a plan to build or buy refineries in other countries in order to guarantee long-term sale of its crude oil, an Iranian deputy oil minister says.

“In order to boost oil exports, we must create new demand outside the country so that we would be able to guarantee long-term sale of our country’s crude oil ,” Abbas Kazemi, deputy oil minister and managing director of the National Iranian Oil Refining and Distribution Company (NIORDC), told IRNA on Tuesday.

The official noted that investing in overseas refineries is one of the most common ways used by oil producing countries to boost crude exports, saying, “Therefore, the Iranian Oil Ministry is planning to invest in refineries in countries whose crude oil is being supplied by Iran.”

The official rejected claims that buying refineries outside the country is not economically justifiable, saying, “Purchasing refinery outside the country is a correct measure due to the security that it creates for selling our crude oil.”

Kazemi stated that new refineries are also very profitable, so that, their profit adds up to USD 8-9 per barrel of crude oil.

“In line with this plan, Iran has already started negotiations with some countries in Asia and Europe, including Spain, to purchase refineries,” he said.

Iran has been taking steps to boost production and export of its crude oil following conclusion of a nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), with six world powers in Austrian capital city, Vienna, in mid-July.

According to JCPOA, the United States and the European Union will lift sanctions imposed on the country’s economic and energy sectors in return for certain restrictions on Iran’s civilian nuclear program.

The country is also planning crucial measure to streamline its oil and gas production and refining installations in preparation for reentry of Iranian crude oil into the global markets once sanctions are removed.

Speaking to reporters on November 3, Kazemi said Iran has already started talks with foreign companies for an extensive revamp of its oil refineries, which are in dire need of upgrade after years of draconian Western sanctions.